Domestic waste paper prices experience sharp decline amidst weak demand of paper

Domestic waste paper prices experience sharp decline amidst weak demand of paper 

- waste paper, which was previously priced at Rs 19.50 per kg, has now plummeted to INR 15.50 to 16 per kg
- Kraft paper mills in North India are expected to temporarily halt production from 12 to 16 Feb, with a possibility of a few mills closing down

The Pulp and Paper Times | 16th Feb 2024

In a significant development, domestic waste paper prices in India have taken a substantial hit, witnessing a staggering 20% decrease. The Pulp and Paper Times has initiated a comprehensive discussion, exploring the factors behind the declining domestic waste paper prices. The weak demand for kraft and duplex, analyzed in association with waste paper dealers, adds complexity to the challenges faced by the paper industry in its growth trajectory. 

Mr. Naresh Singhal, President of The Indian Recovered Paper Traders Association (IRPTA), shared insights into the current state of the paper industry. He highlighted a substantial and alarming decrease in prices, citing that waste paper, which was previously priced at Rs 19.50 per kg, has now plummeted to INR 15.50 to 16 per kg. Additionally, finished kraft paper of 18 bf witnessed a significant drop from Rs 31 per kg to Rs 26 per kg within the span of ten days.

The entire country, including regions like North India, Maharashtra, and the Gujarat belt, has witnessed a uniform 20% reduction in waste paper (kraft paper) prices over the last 9 to 10 days. Various grades, such as Corrugated waste, Core pipe, Duplex cutting, and white grade materials like Children Note Books, REC, Super REC, HBR, Sorted Books, and Old Books, have experienced noteworthy declines compared to rates just eight days ago.

As bad demand exerts pressure on the market, waste paper stockists are responding by selling their stocked goods, originally priced at Rs. 13 to 14 per kg. This oversupply of waste paper in comparison to demand has led to a substantial 20% drop in prices.

Mr Singhal further added, “This situation might stretch to March month, however there could be price correction in next 8 to 10 days as market drop to straight one sided. Right now waste paper market is stable now, and we can expect the impact of price decline on white grade material.”

Mr. Singhal anticipates that waste paper prices might stabilize, as stockists have begun refilling their go-downs that were emptied during the recent price correction. However, challenges loom as Kraft paper mills in North India are expected to temporarily halt production from 12 to 16 Feb, with a possibility of a few mills closing down.

He added, “We are expecting new waste material in children books segmet after 15th march as their exams have started. We are hoping that price for kraft waste paper will not go behind Rs. 15 or 15.50 per kg as imported fibre is coming around at hard price to India due to red sea crisis”

Dealers of finished paper are refraining from placing new orders to paper mills amidst the declining prices. They are selectively placing orders only for items in short supply, leading to market manipulation. Sluggish demand in the finished paper and board segment has forced paper mills to cut down rates, causing financial strain across the entire supply chain.
While Mr. Singhal foresees the situation potentially stretching to March, he holds a cautious optimism, anticipating a price correction in the next 8 to 10 days. He points out that the waste paper market is currently stable, and the impact of the price decline is noticeable, particularly on white grade materials.

With new waste material expected in children's books after March 15th, hopes for stability emerge. However, concerns arise as the price for kraft waste paper faces potential challenges, driven by the hard pricing of imported fiber due to the red sea crisis. Mr. Singhal notes that paper mills are opting for local waste paper for production, and only old booking shipments, booked at lower rates during October or November 2023, are arriving. Adding to the challenges, shipping lines are currently not accepting fresh bookings for Indian destinations, further complicating the dynamics of the industry.
 

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